Why Singaporeans must watch out for the 6 million opportunities in China

For Singaporean companies looking to expand, China remains one of the most attractive markets in our region and should be on every company’s watch list. This year a glut of university graduates seeking jobs provides an opportunity available to all companies but Singaporean companies have a head start.

Higher education in China has expanded rapidly, over six million Chinese students will graduate from universities this year. As a result the unemployment rate for these graduates is more than 16% which is depressing starting salaries. This represents for all companies a great opportunity to acquire low cost, highly educated talent.

Singaporean companies with managers fluent in Mandarin are well positioned to take advantage of this talent pool. U.S. and European MNCs often require good English language skills, this limits their options and pushes up the salaries for these candidates. But many smart people have poor linguistic skills and these graduates are available to Singaporean companies.

If your company is already established in China consider hiring several graduates for development. You will need a strong mentor – choose a manager who has already shown an ability to develop new employees. Due to the low starting salaries you can afford to over hire and terminated the weaker employees at the end of their probation period.

However do be aware of the labor laws in China. Make it clear to new hires they are on probation and, assuming a six month probation period, give them progress reports every two months. This will serve two purposes; it will give your employee an opportunity to improve on weaknesses and build on strengths, plus provide you with an evidence trail of poor performance should it necessary to end a probationer’s employment.

A good mentoring program though is more than a development tool; it will be key in hiring quality graduates. Chinese university graduates are quite conservative when it comes to choosing their first jobs. The majority would chose to work for the government or one of the massive State Owned Enterprises which are seen as providing stability and proof against recession.

However like university graduates everywhere the Chinese place a high value on training and career development. Show candidates that you can provide both and you will be able to attract talented employees.

Companies that are willing to invest in development of Chinese graduates will be able to build a pool of talent which will greatly enhance their chances of success in the Chinese market. I am convinced that companies are more likely to succeed in China if the local business is managed and run by Chinese nationals.

This opportunity will not exist forever as China moves from a labor based economy to a knowledge based economy the demand for university graduates will increase. And supply may decrease as some school leavers will decide that a university education is not such a great investment. However at the moment there is a unique opportunity to hire and develop your company’s future in China at a very low cost.

Six million opportunities beckon for you.